§ Lord MoyneMy Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government why exemption from VAT is denied to repairs of listed historic houses while it is granted to alterations to such houses.
§ Lord Brabazon of TaraMy Lords, the repair or maintenance of buildings, listed or otherwise, has always been liable to VAT at the standard rate. On 1st June 1984 alteration work, previously liable at the zero rate, became standard-rated, but zero-rating was retained for approved alterations to listed buildings and scheduled monuments so as not to worsen their position in relation to VAT. This concession was widely welcomed by those concerned with the preservation of our national heritage.
§ Lord MoyneMy Lords, while I thank my noble friend the Minister for that reply, I have to declare an interest, in that I live in an old, listed house. The buckets are not at the moment under the roof and therefore my interest is not immediate. Is my noble friend aware that, owing to the VAT anomaly, owners have a tendency to make alterations instead of repairs? Will he consider introducing a flat rate for both categories so as to produce approximately the same amount of revenue? Would the EC accept such an arrangement, which might well be imitated to advantage in Europe? Finally, does not a stitch in time save nine?
§ Lord Brabazon of TaraMy Lords, the answer to my noble friend's last question is yes. He asked me a number of other questions. With regard to relief on alterations and whether it may be an incentive to make undesirable changes, we do not believe that is so. Relief is available only for approved alterations. Planning authorities can always refuse listed building consent for work that would affect the character of a listed building or destroy important features.
§ Baroness BirkMy Lords, is the Minister aware that in its most recent report the House of Commons Environment Committee unanimously recommended that the owners of listed buildings should be relieved of the burden of 15 per cent. VAT on repairs and maintenance by allowing them to recover it through the taxation system? I repeat that it was the committee's unanimous recommendation.
§ Lord Brabazon of TaraMy Lords, the Government are of course considering all the Select Committee's recommendations and will publish their observations as soon as possible.
§ Lord KennetMy Lords, is the Minister aware that not only the House of Commons committee but all the voluntary organisations and statutory bodies in the country concerned with this matter have been unanimous in their condemnation of the anomaly? Is the Minister further aware that if there is anything else that they condemn it is the extremely poor argument produced by the Government to justify the system since it was introduced?
§ Lord Brabazon of TaraMy Lords, I should point out that, while presumably everyone who has to pay VAT on anything would like zero-rating, we believe that zero-rating would be indiscriminate. We give grants where help is most needed. In England this year such help for historic buildings from central government will amount to over £22 million. Local authorities also make grants from their resources, but I do not have that figure.
§ Lord Boyd-CarpenterMy Lords, while declaring an interest a great deal smaller than that of my noble friend Lord Moyne, may I ask my noble friend the Minister how he justifies in logic exempting alterations and charging on repairs? Surely if the object is to preserve such buildings, repairs are, if anything, the more important?
§ Lord Brabazon of TaraMy Lords, the repair or maintenance of buildings, listed or otherwise, has always been liable to VAT at the standard rate. My noble friend will no doubt be aware that the Government accept that they have no authority under the EC sixth directive to introduce any new zero rate or to restore one which has been given up.
Lord Bruce of DoningtonMy Lords, in view of the noble Lord's reference to buildings, whether listed or unlisted, will he inform the House what the Government propose to do if the present case, No. 816 of 1985, currently before the European Court results in the Government being ordered to levy a 15 per cent. VAT duty on all new houses, thus increasing the average price of a house by some £4, 500? Will he confirm that the only reason why Her Majesty's Government have not thought fit to disclose their pleadings in this case is that they would really like to have the tax levied?
§ Lord Brabazon of TaraMy Lords, the Question refers to "listed historic houses" and I shall restrict my answers to that.
§ Lord GrimondMy Lords, is it not apparent that this is quite contrary to common sense? As has been said, to levy tax on repairs, which are much more important than alterations, is nonsense. If the EC is the stumbling block, can the Minister say what representations have been made? The House should not accept that because this has always been the position it should continue. The whole country must see that such a levy is nonsense.
§ Lord Brabazon of TaraMy Lords, I have said that there are ways of giving grants other than exempting from VAT. That is what we seek to do.
§ The Earl of OnslowMy Lords, will my noble friend tell us, in view of the grant of £22 million towards repair of historic buildings, how much has been raised through VAT on repairs to such buildings? Are the two sums by any chance about the same? That seems to be very dotty.
§ Lord Brabazon of TaraMy Lords, I do not have a figure for VAT charged on repairs to listed historic houses. I understand that there is no definition as such of a listed historic house.
§ Lord KennetMy Lords, is this an announcement of new government policy; namely, to abolish the List of listed buildings? For the last 40 years there has been a list of buildings of architectural and historic interest commonly known as the List. Houses on it are listed houses. When the Government say that there is no definition of a listed house, is this an announcement that the List is to be abolished?
§ Lord Brabazon of TaraMy Lords, no.